S 2980 — Revises reporting requirements for nursing homes concerning financial disclosures and ownership structure.

S2980 1R [First Reprint] SENATE, No.

Senators Cruz-Perez, Ruiz, Turner, Singleton, Cryan, Greenstein, ZwickerZwicker, Mukherji, Burgess and MukherjiDiegnan         SYNOPSIS      Revises reporting requirements for nursing homes concerning financial disclosures and ownership structure.

  CURRENT VERSION OF TEXT      IntroducedAs Pendingreported Technicalby Reviewthe bySenate LegislativeHealth, Counsel.Human Services and Senior Citizens Committee on March 16, 2026, with amendments.

      “Substantial management control” means the authority to direct the operation and administration of a nursing home, including, but not limited to, exercising control or authority over resident admissions, room assignments, number of beds, staff hiring, staff scheduling, staff assignments, personnel issues, billing, purchasing, managing vendor contracts, establishing and enforcing operational protocols and procedures, resident safety, infection control, communicating with and reporting to governmental and other entities, and ensuring compliance with State and federal requirements concerning the operation of the nursing homehome; ;

        7.   (New section)  The State Comptroller, in consultation with the Department of Health and the Department of Human Services, shall be authorized to monitor, review and audit owner-certified financial statements in accordance with P.L.2005, c.119 (C.

            9.  9.    (New section)  Notwithstanding the provisions of section 91[9] 81 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), the Commissioner of Health and the State Comptroller may issue notices to interested parties to implement the provisions of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), which notices shall be valid for no more than one year from the effective date of sections 1 through 8 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), provided that such interested parties are provided with notice of at least 30 days of the intent of either the Commissioner of Health or the State Comptroller to issue such notice.

    STATEMENT         This bill revises the reporting requirements for transfers of nursing home ownership and assignments of substantial management control over a nursing home to a third party entity.

      Specifically, the bill requires nursing home owners and operators, as well as applicants for a transfer of ownership of a nursing home and third party entities exercising substantial management control over the nursing home, to provide an organizational chart identifying:  parent entities and wholly-owned subsidiaries;

principals that provide a service, facility, or supplies to the nursing home;

and unrelated parties that provide a service, facility, or supplies to the nursing home that are paid $200,000 or more by the nursing home.  In the case of an applicant for a transfer of ownership of a nursing home, these disclosures will be based on expectations with regard to services, facilities, supplies, and payments.        For applications for transfer of ownership of a nursing home, the organizational chart is to be posted on the Department of Health’s (DOH’s) Internet website, along with a copy of the transfer of ownership application, which is currently required to be posted on the DOH’s website.

      The bill removes a current provision of law that allows applicants for transfers of ownership to prepare and submit a summary of the application information that omits proprietary information and can be used for public disclosure purposes.  The bill additionally removes a provision of current law that provides nothing in a transfer of ownership application may be used in an adverse licensure or disciplinary action against the applicant.

      The bill revises the current requirements for approval of a transfer of ownership application to provide that approval is contingent on review of the applicant’s history of disciplinary actions involving facilities owned, operated, or managed by the applicant in both New Jersey and in any other jurisdiction;

under current law, this review is limited to New Jersey facilities.  Under current law, approval is additionally conditioned on payment of outstanding and issued Medicaid audit claims and penalties issued by the Department of Health (DOH);

the bill adds as a condition of approval that there be payment of all Medicaid overpayments, and requires payment of any State-issued penalty, not just those issued by the DOH.  The amended bill further specifies that, if any Medicaid overpayments are identified after the transfer of ownership occurs, the new owner will be required to submit an affidavit to the DOH and to the State Comptroller identifying the responsible party for the overpayments.

      The bill revises the mandatory components of the annual reports nursing homes are required to submit to the DOH to additionally require balance sheets include information concerning equity, and statements of operations include specifically itemized expenses related to leases of land, buildings, and equipment, loans of equipment, and contracts in excess of $10,000 per year for any service, as well as details concerning any mortgagee for the land or building used by the nursing home.  The reporting requirements will also include information concerning the owners and operators of related parties to the nursing home and entities other than a nonprofit organization that have an ownership interest of five percent or more in a private equity fund that is invested in the nursing home.

      The bill revises the threshold for reporting certain interested party transactions from $2,500 per year to $10,000 per year.

The bill further requires enhanced disclosure of the owners and principals of the owners, management companies, and related parties to a nursing home, including the owners and principals of holding and parent companies and subsidiaries, as well as limited liability companies.        The bill further revises the current financial disclosures required for nursing home owners and operators, to require the submission of an owner-certified financial statement that:

      1)   is reviewed or audited by a certified public accountant and performed in accordance with generally accepted accounting principles in effect the day the application or statement is submitted;

and       2)   includes:  a balance sheet detailing the assets, liabilities, and equity the end of the reporting entity’s fiscal year;

a statement of income, expenses, and operating surplus or deficit for the annual fiscal period;

a statement of changes in equity;

a statement detailing patient revenue by payer, including, but not limited to, Medicare, NJ FamilyCare, and other payers, and revenue center;

a statement of cash flows, including, but not limited to, ongoing and new capital expenditures and depreciation;

a combined financial statement that includes all entities reported in the owner-certified financial statement;

and any other information, data, and documents as may be required by the Commissioner of Health or the State Comptroller.        The bill specifies that an owner-certified financial statement required under P.L.2021, c.457 (C.26:2H-46.3 et seq.) is to meet the requirements for owner-certified financial statements established under the bill.        The bill further specifies that a health care system consisting of more than one nursing home will be required to submit owner-certified financial statements that consolidate the financial data across all nursing homes that are a part of that health care system, together with a statement of operations or income with respect to each nursing home in the health care system, which statements of operations or income may be submitted in a supplemental schedule.  A nonprofit nursing home that files a copy of its most recent Internal Revenue Service Form 990 Public Inspection Copy with the DOH and the State Comptroller, and a nursing home that files with the DOH and the State Comptroller a cost report with an audited financial statement that has been submitted to the federal Centers for Medicare and Medicaid Services, may each be deemed to have satisfied all or part of the requirements of an owner-certified financial statement established under the bill.

      For applicants for a transfer of ownership and entities seeking to delegate management of a nursing home, this information will be included with certain materials that current law requires be provided to the Department of Health (DOH).  The bill expands the disclosure requirements under current law to additionally reference limited liability companies, which will be required to make the required disclosures for each member of the limited liability company.

      The bill revises a current requirement for nursing homes to submit certain information to the DOH within 90 days after the end of the fiscal year to require the information be submitted 150 days after the end of the fiscal year.  The DOH will be required to immediately transmit submitted nursing home reports to the State Comptroller.  All information submitted under the bill with regard to transfers of ownership, annual reporting, and delegations of substantial management control, is to be certified under penalty of perjury that the information is accurate and complete.  All information submitted will additionally be deemed a public record.        The bill revises the current penalties that apply for failure to make a required report or for submitting false information.  Current law authorizes a civil penalty of $10 to $100 per day for each day the report is not filed or corrected.  The bill revises the civil penalty to up to $200 per day, makes the penalties discretionary, and authorizes the DOH to curtail resident admissions to the nursing home.

      The bill provides that the State Comptroller, in consultation with the DOH and the Department of Human Services, will be authorized to monitor, review and audit owner-certified financial statements in accordance with certain existing statutory authorities, and will be authorized to obtain information and testimony, issue reports, make referrals, and coordinate with and require the cooperation of State agencies in the same manner as permitted under those existing statutory authorities.

      The bill grants the DOH and the State Comptroller express authority to promulgate rules and regulations to implement the bill, and the authority to issue temporary notices to implement the bill, which notices will be valid for no more than one year after the date the bill is enacted.